College Education and Debt

College Education – Degrees, Costs & Student Loan Repayments

28 Oct , 2015  

 

Do you have a college education? If you do, who paid for it? Do you have student loan debt? If so, how do you plan to pay it off?

Education requires student loan

Having a college degree—and, of course, a college education—under your belt will greatly improve the odds of landing your dream job, as you will be qualified for many more positions than your non-degree-possessing counterparts.

The degree, whether it is an associate, bachelor’s, or master’s degree, is a key of sorts to a long list of potential job options. And honestly speaking, most companies seeking to fill high-paying jobs will not even glance at your resume if you do not possess a certain degree.

Once you have stepped into the world of time crunches that is raising a family while juggling the demands of a full-time job, you might not be able to take advantage of the concentration of knowledge that you can absorb through attending university classes. You will most likely be unable to pore over textbooks, study for hours on end, and share ideas with classmates and fellow students outside of the classroom.

That said, if you start attending college in the hopes of earning a degree after you have children or get a full-time job, you will learn the essential skill of time management, which is an extremely valuable asset that potential employers will love. (We will talk about time management in one of my upcoming blog posts.)

Figuring out how you will pay for your college education is another matter altogether. Most people simply can’t afford to pay for college out of their own pockets.

While those who live with their parents can cut down on their overall debt, they are not forced to become independent the way college students who live on their own must (i.e., planning out and shopping for meals, budgeting their living expenses, figuring out the logistics of various household tasks, etc.).  Living on your own while attending college also gives you an education in dealing with the outside world. And in my experience, working hard to continue your education leads to a feeling of pride and accomplishment. (We will be discussing the experience of juggling work and school in my next blog post.)

student loan debt

When I started college in the city of Pune in India, it was very difficult—if not downright impossible—for non-Pune residents to get a student loan, so I had to make do with my scholarship money, which covered only tuition fees. College books were very expensive, so I spent a large portion of my time cooped up in the library reading any textbooks I could get my hands on.  When reading for school, I liked to underline certain passages and scribble notes in order to help me commit them to memory, but I obviously couldn’t do this in the library books, so I instead had to develop various mental codes and methods to remember things, which I then jotted down in my notebook. I actually use this code system to this day.

To supplement my scholarship money, I tutored local high school students in mathematics. My mother also did her best to send me a little bit of money whenever she could. These days, however, a student loan is the only way many students are able to afford a college education.

The following information regarding loans is mostly for US-based students. Every country has a different way of dealing with the financial aspects of their college students’ education. If you are not US-based, I highly recommend researching options in your home country.

With a student loan comes the inevitable and often financially crippling loan repayment plan. According to a 2014 report from the Institute for College Access and Success (TICAS), as reported by the U.S. News and World Report, nearly 7 in 10 graduating seniors left school with an average student loan debt of nearly US$30,000, up 2 percent from the previous year. And this statistic may be even higher in reality, due to the fact that this study may not have considered all private loans, which are separate from the federally funded student loan program.

Post-college life is filled with excitement and challenges; to add the weight of a multi-thousand-dollar debt, especially when you may not have yet gotten that great job promised by your career counselor, can be overwhelming. The first step—and it’s a critically important one—is to set up a budget to track your income and expenses. This will allow you to see on a sheet what you have left after paying the essentials, including rent or mortgage, utilities, credit card payments, and your student loan. In addition to logging these essentials, I urge you to include a detailed list of everything you buy and what you paid for it—and this includes everything from a night out on the town to your gym membership to a new pair of jeans.  Doing this may seem and feel tedious, but it is the best way to see where your money is going. Then you can pinpoint areas where spending is disproportionally high in relation to your income and take measures to reduce that monthly amount. Software programs like Quicken® are available for inexpensive purchase, and you can use them to generate a personalized budget framework—and at the same time learn new bookkeeping and software use skills.

There are also ways to lessen the burden based on the type of loan you choose. Federally funded student loans have consumer protections built in that allow for reduction or deferral of payments in case of financial hardship. In response to the increasing student loan debt in the US, President Obama enacted modifications to further cushion the blow of student repayment in 2015. Changes include capping loan payments at 10 percent of your income and forgiving remaining debt after 10 years for responsible payees who work in public service jobs such as teaching, nursing, and the military (you can read more about these modifications here).

There are also sources of financial assistance that don’t have to be repaid. Federal Pell Grants are available to qualifying applicants to help disadvantaged students toward their goal of a higher-level education. President Obama is also working toward increasing the amounts available for these grants.

Various scholarships are also offered to help applicants who fit the required criteria. These are usually offered by academic institutions (though private companies make some available as well), and are based on scholastic achievement, financial need, or ethnicity. A search for available scholarships in the Internet comes up with a surprising number of options. Just be wary of utilizing a site that doesn’t end in .edu or .org.
Once you know your options and the amount of money at your disposal look for a college that will fit the bill. In most of the cases the State colleges might be much more affordable than the private ones. And start also looking for a job which will not take away more than 5 – 10 hours per week of your time so that you can have something extra kept on the side to handle any emergencies.

How many of you have student loans? How are you repaying those loans—or, if you’re still in school, how are you planning to repay them? Have you put together a budget to keep track of your finances? Let’s start a conversation.

Sharing stories and information on this subject with other students and whoever else is willing to listen and provide guidance will hopefully help to ease the feelings of helplessness that can overtake those with large student loan debts. Please share your thoughts by writing to me at shaku@atre.com.


Other Resource –

  1. 15 ways to deal with student loan debt
  2. Strategies to help you get out of debt

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